Financing Your Business Start Up In 2009

Financing Your Business Start Up In 2009


You’ve recently been laid off from a job or are expecting to lose your position early next year. Like so many people you’ve seen the current economic downturn decimate your industry, threatening to skewer the 2009economy further.

Likely, you are considering your all of your options, perhaps taking a fresh look at starting your own business. In your younger years this may have sounded too risky of a proposition, but you’ve been through tough times before and believe that you have the intestinal fortitude to make a go of it. Besides, “ageism” is a word you’re quite familiar with and rightly believe that you’ll have a tougher go of finding work this time around.

Perhaps you already know the type of business you want to start but like all potential business operators funding is an issue. One of the best places to visit to learn about how to launch a business is the U.S. Small Business Administration (SBA) website. That site offers excellent planning tools, resources and related information to starting, managing and expanding your business.

When it comes to financing, the SBA is worth considering but with so many start ups being hatched each year and with so few people receiving financial support, you’d probably do better seeking help elsewhere including in the following ways:

Tap Home Equity – If you live in area of the country where home prices have stabilized and you have a sufficient equity stake in your home, then a home equity loan can be helpful. Qualifying for a loan these days is more difficult, but if you are approved then you can use those funds to start your business. An added advantage is that your loan is tax deductible.

Visit Your Bank – Banks are in the business to lend money, but if your regular bank rejects you don’t forget that there are plenty of community banks and credit unions who would love to have your business. When conventional bank loan money isn’t available, an SBA-guaranteed loan can be another option. Your lender may be approved to issue these types of loans.

Borrow From Peers – One of the newest crazes in business financing is peer-to-peer lending, particularly via online sites such as where you can borrow money from people just like you. Rates are higher than most other lending options, but if you need a relatively small amount of money and can repay your loan within three years time, this may be an option for you.

Maximize Credit Cards – If you are risk adverse and don’t want to mortgage your house to pay for your new business, then borrowing off of your credit cards is another option. Rates and fees can be very high as this is unsecured debt. Still, if you really don’t have any other choice, then maxing out your credit cards could be the way to go.

Lastly, consider borrowing money from family members and/or friends. These people know you which can make all the difference in the world as to whether you’ll receive their financial support or not. To be safe, put the loan terms in writing and seek legal assistance if the funds are substantial.

Once funding is in place, you’re ready to get your business started. Use a business like LegalZoom to establish your business legally, register with the state, and make sure that you obtain an Employee Identification Number from the Internal Revenue Service.



National Association of Certified Business Brokers

SayConsolidate (debt consolidation)

Small Business Administration


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Categories: Business Services

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".